Lesotho-Traders have applauded the Lesotho Revenue Authority (LRA) for its new initiative to intensify lifestyle audits on wealthy individuals, high-profile figures, and traders, to check their tax compliance.
The move was prompted by an outcry by the business community, and some Basotho nationals, who say tax evasion by some of them, has a negative impact on the economy of the country.
One of the traders, Vaal Moosa, said LRA has taken a good move which will ensure that public members who do not pay tax, are dealt with accordingly.
He said some of the traders who do not pay tax, are those whose businesses have been established illegally.
Moosa said it is would be worthwhile for legal measures to be taken against the perpetrators.
On August 5, LRA expressed disappointment at the level of voluntary remittance of levies by eligible taxpayers.
Announcing a new campaign aimed at discouraging tax-evasion which is said to have reached worrisome levels, the LRA Commissioner of Enforcement, Advocate Realeboha Mathaba, said failure to pay tax was a crime, hence the authority’s initiative to highlight this to the public.
“It has come to the attention of the LRA, that while some taxpayers comply with their tax-obligations and pay their fair share of taxes, others have opted not to comply,” Mathaba said at a press briefing held in Maseru.
“This is not only criminal and unfair to complying taxpayers, it also promotes unfair competition in the case of business and undermines the integrity of our tax system. Most importantly, this hinders government’s ability to provide a fair system that makes sure that everyone complies and pays his or her taxes.”
Mathaba further said the new campaign would involve a number of initiatives such as increasing audits on traders, high-profile and wealthy individuals, collecting tax from diplomatic missions’
employees, and improved record-keeping at the LRA, among other things.
“We have, therefore, found it imperative to share with you the following initiatives the authority is engaged in to maximise compliance and ensure that we all make our contribution in the national purse for the benefit of our countrymen.
These initiatives are: 1)- intensifying lifestyle audits on traders, high-wealthy individuals and high-profile figures to check their compliance. Audits that have so far been conducted in this area have indeed confirmed huge discrepancies between the lifestyle which some taxpayers are leading and the returns that they are submitting to the authority. This group includes professionals whose compliance is not where it should be.
Number 2)-We also plan to conduct audit on taxpayers who have consistently filed nil returns or are perpetually on a refund position. We have since realised that the self-assessment system is subject to abuse as some businesses are continuously filing nil returns or are perpetually on a refund position.”
Mathaba further said the tax authority had been given a tough task of collecting M5 billion for the current financial year by government, which is 28 percent more than the target set for the year 2012/13, hence the new drive to ensure compliance by every eligible taxpayer.
Asked about the general trend in tax compliance in recent years, Mathaba said: “What we have observed is that the level of compliance is not where it should be. Some taxpayers who used to pay their dues have stopped doing so, completely. So part of what we are trying to achieve with this campaign is to find out what went wrong so that we can offer assistance, because we really want to strengthen our relations with them to make our job and their tax-obligation easier.”
The LRA, he added, was also developing a criteria that would recognise voluntary disclosure of non-compliance by reducing penalties, but at the same time, imposing penalties where taxpayers deliberately avoid paying levies.
The Lesotho Revenue Authority’s strategic objectives amongs others put emphasis on fighting corruption and tax evasion, by the Authority’s personnel and tax payers, or any other person.